"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey
I scan insider trades from various sources throughout the day, and insiders are exercises and selling at a very high clip. This being said, I think you'll find that the old "Sell in May, and go away" saying may actually mean something this year.
Checkout today’s insider activity, and look at the number of options that were exercised and cashed in- Insider-Monitor. You can also click on the "past buys and sells" and see what insiders have bought and sold over the past 7 days.
Today was options expiration, so trading volume was heavy. Much will be made of the markets technical breakout above 1380 on the S&P, closing at 1390.33 today. To quote the guys I use to play ball with in the streets of Detroit, "It ain't nothin but a thing". For those of you not familiar with this term it means "no big deal".
Actual overhead resistance on the S&P remains the 1380 to 1410 zone. The DJIA looks like it could reach the 13,000-13,500 before running into trouble.
With all that’s happening in the credit markets, oil, inflation, and our worthless currency, you're probably wondering why the market is so euphoric. I'll tell you what I think.
The market smells a bailout coming for real estate, and hence the credit markets. Rumors have circulated that FHA will take millions of sub-prime mortgages off the hands of lenders, and the second rumor is the possible rebirth of the "Resolution Trust Corporation" that bailed out the real estate crisis in the 1980's.
While I believe solutions like these are in the works, the timing of implementation is the million- I mean trillion- dollar question.
Looking at the situation through my "critical eye", I have got to believe the solutions to the crisis will depend on who the "influential powers" want as their next President.
If the powers want a Republican to have a chance in November, you may see implementation of a bailout plan in late spring or early summer. In addition, energy prices will magically decline, the dollar will rally, commodity & precious metal prices will fall, and inflation fears will subside.
If the powers want their Democratic nominee to win, the implementation of a bailout plan may not happen until the first or second quarter of 2009.
Regardless of when a bailout occurs, the LIBOR (London Interbank Offered Rate), rate is signaling that the woes in the credit markets still may have a ways to go.
Okay, now that were past that, I believe any stock market rally while oil prices remain above $90/bbl, real estate remains in the tank, and the banking system is in turmoil is unwarranted. It's only a mirage.
